REG - Arbuthnot Banking - Sale of long leasehold property

Arbuthnot BankingAnnouncement

20/07/2022 17:30

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RNS Number : 2017T  Arbuthnot Banking Group PLC  20 July 2022

 20 July 2022

 

Arbuthnot Banking Group PLC

 

Sale of long leasehold property

 

 

Arbuthnot Banking Group PLC ("Arbuthnot" or the "Group") today announces that
its subsidiary, Arbuthnot Latham & Co., Ltd (the "Bank"), has reached a
conditional agreement with Glory Development UK Property Holding Co Limited,
to sell its long leasehold West End office property known as 20 King Street.

 

The completion is conditional on receiving consent from the Crown Estate who
are the owners of the freehold.

 

This is part of the previously announced plan to exit non-core assets to focus
the Group on achieving its capital efficient "Future State" plan (see the
Annual Report & Accounts).

 

The offer for the building is initially valued at £60m or a yield of 3.75%
being settled in cash.

Given that the building is in the process of being let out, following an
extensive refurbishment and upgrade, there are two subsequent purchase price
adjustments.

 

Firstly, any tenant incentives that are outstanding at the time of completion
will be deducted from the proceeds. Secondly, an adjustment will be made for
the void period required to find the remaining tenants to fill the building.
This will be made via an escrow account and will be limited to up to 12 months
of the expected rental income for each vacant floor.

 

Currently a tenancy agreement in place for the ground and the fourth floor is
expected to be finalised before completion takes place. Negotiations are
ongoing with interested parties for the remaining first, second and third
floors.

 

The building is recorded on the balance sheet at £60.6m. The deduction for
unexpired incentives is expected to be £2.4m and the void period deduction is
anticipated to be £0.96m with an average of 6 months to complete the letting
process.

 

The cash consideration will form part of the normal funding resources of the
bank with its surplus liquidity being held at the Bank of England ("BoE"),
which is currently earning 1.25% being the BoE base rate. The transaction will
also release £8.4m of capital that will be allocated according to the "Future
State" plan, which has been previously announced by the Group and sets out the
optimal usage of capital for the development of the businesses.

 

Enquiries:

 

 Arbuthnot Banking Group                         020 7012 2400
 Sir Henry Angest, Chairman and Chief Executive
 Andrew Salmon, Group Chief Operating Officer
 James Cobb, Group Finance Director

 Grant Thornton UK LLP (Nominated Adviser and
 AQSE Exchange Corporate Adviser)                020 7383 5100
 Colin Aaronson
 Samantha Harrison
 George Grainger
 Ciara Donnelly

 Shore Capital (Sole Broker)                     020 7408 4090
 Daniel Bush
 David Coaten
 Tom Knibbs

 Maitland/AMO (Financial PR)                     020 7379 5151
 Sam Cartwright

 

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